How Credit Card Companies Trap Their Customers
It is one of the most profitable businesses for banking industry: credit cards. The nearly magical convenience of these plastic cards encourages our compulsive behaviors. With more than a billion of credit cards in circulation which account for trillions of dollars of consumer spending, the world economy has obviously gone plastic.
Many families use their general-purpose, personal credit cards such as American Express, Discover, Visa and Mastercard to make ends meet; these cards have become discreet lifelines for people in financial straits. But more prudent consumers use plastic strictly for convenience. While it would seem that they — who charge a small fortune each month on their credit cards — are the ideal customers, actually, they are what some in the banking industry call a “deadbeat.” That is because they pay their balance in full each month. The best customers are those who make a minimum payment each month, as a large percentage of the payment goes toward the interest. (more…)
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